That was Pittsburgh Mayor Bill Peduto’s primary message to City Council and the public Tuesday morning, as he shared details of the Steel City’s dire financial situation and challenged his colleagues in city government to help find solutions.

The address coincides with Tuesday night’s public hearing on the city’s financially distressed status, an event organized by Act 47 coordinators.

Peduto said the city is facing an annual structural deficit of $20 million dollars for the next five years. But even if the city found an additional $20 million a year, Peduto said it would still be in trouble.

“Because we’ll never have done anything to fix our pension obligation, and those pension funds will dry up,” Peduto said. “We’ll never be able to pave the streets, or fix the rec centers, or take care of our assets because we don’t have an adequate capital budget.”

Including the city’s unfunded pension obligation and capital needs, Peduto said the deficit jumps to $60 million annually.

Peduto said the financial shortfall is the legacy of inaction and poor management over the last decade or so. For example, he said it’s not an especially harsh winter that’s to blame for the poor condition of city streets.

“It’s because we’ve ignored the problem for a decade, of putting together a management plan to take care of them over the long term,” Peduto said.

The Mayor was reluctant to detail any specific solutions to the city’s fiscal woes, saying that he wanted to hear the Act 47 team’s ideas and, more importantly, he wanted the public to know that their input was welcome and valued.

Peduto said the ultimate plan would represent a complete restructuring of the city budget, and that things would be done “the Pittsburgh way.”

“Pittsburgh is about self-responsibility,” Peduto said. “It’s about addressing issues head on. It’s about showing daylight on the problems that are there, and then finding real solutions to solve them.”

The city is required to present a five-year plan for exiting Act 47 status to the state by the end of June.

“We’ve got the next two months to solve the problems of the last fifty years,” Peduto said. “We’ve got the next two months to create a city … for the next fifty years.”

Tuesday evening's public hearing on the city's Act 47 status begins at 7 p.m. at the William Pitt Union at 3949 Fifth Ave.

Related Content

Act 47 was introduced by the Pennsylvania state legislature in 1987 as a means of helping financially distressed cities recover and avoid bankruptcy. 27 years later, several municipalities that were placed under Act 47 oversight have never rebounded.

State Senator Rob Teplitz (D – Dauphin) hopes stronger legislation would help these municipalities have their distressed status removed, while at the same time preventing other municipalities from entering Act 47.

With the thanks of Pittsburgh’s mayor, Gov. Tom Corbett Thursday announced that the city would remain under the controls of Act 47.

Pittsburgh entered into distressed-city status 10 years ago, and the Ravenstahl administration had argued in 2012 that enough progress had been made to release the city from its bonds.

“While Pittsburgh continues to take considerable steps in its efforts in stabilizing the city’s financial position, many conditions that originally led to the distressed determination have not been alleviated,” Corbett said.

A week after Pittsburgh Mayor Bill Peduto sent a letter to Gov. Tom Corbett asking that the city stay under Act 47 state oversight, the city’s firefighter’s union is asking the opposite.

“The Act 47 team wrote a letter to the governor saying, ‘We’ve exceeded all of our financial expectations by the plan.’ And as such they recommended that we go out of 47,” said union president Joe King.

In 2003, the city of Pittsburgh was operating under a debt burden of more than 20% of its operating budget. Pools and recreation centers had to close and hundreds of city employees, including police officers were laid off.

As the local economy has stabilized, former Mayor Luke Ravenstahl, along with Act 47 coordinators have said the city is ready to be released. But Pittsburgh's new Mayor Bill Peduto is asking Governor Corbett to keep the city under Act 47 oversight to allow his administration to work on a final recovery plan.